You are here:

Monsters from Hell

Created:
16 May 2008
Written by:
Bernard Jones

SUNDAY 20 APRIL: A kick in the warlocks

Took my grandson to Games Workshop for a wargaming day. Saw an astonishing collection of devils, imps and goblins, and that was just the children. The good-natured staff, treated as free child-minders, seemed happy to lead the table-top mayhem in which intricately-painted miniatures did battle amid convincing scenery. Digby's army, largely made up of evil rat-men known as skaven, was outnumbered by the ogres and beastmen of a skinny bespectacled 10-year-old called Trevor. Still, the Antichrist did well until he was ambushed by dark elves, whereupon his warlocks took an almighty bashing. Digby yelled repeatedly in frustration while tiny Trevor tutted at him.

Advertising

"You should grow up," he said, stroking his chief troll. "Learn to lose gracefully."

Digby's reddening ears alerted me to impending violence and I was able to scoop him away before he swept everything from the table. Having delivered the Antichrist home, I looked up Games Workshop shares and saw that they've been recovering reasonably well following weakness earlier in the year when the dividend was cut. Although the products look as enticing as ever, it isn't as compelling a cost-cutting story as others. Chronic Investor says 'High enough', which is hard to argue with.

MONDAY 21 APRIL: Keeping abreast of rivals

Eunice is spring-cleaning the den. That means mayhem for all my papers, and probably a dysfunctional PC afterwards too, after the vigorous scrubbing she is giving screen and keyboard. I'm about to visit the downstairs loo, but discover that she's stacked two boxes of annual reports and Prescott, the giant stuffed pig, on the floor.

Hearing my protestations, Eunice comes in to see me trying to manhandle Prescott out of the door.

"Bernard, please leave him there. He's got bulimia and he needs the loo more than you do."

Eventually I return to my desk and, after rebooting the PC discover two profit warnings. One, I'm delighted to say, is Rentokil, the stock on which I have had a short position since 7 April. Yet, on checking the share price chart, would you believe it, the shares rose from 90p at the open to 97p! How can a dismal company like this warn of a "significant full-year loss" instead of break-even and be rewarded with a higher price? I absolutely do not understand the stock market sometimes, I really don't.

I take some comfort from the other profit warning, though.

This is Sport Media Group, the company that Harry Staines last year boasted was growing profits by 250 per cent a year and had a PE ratio of eight. But the shares, down 11.5p to 30p today, are a long way from the 76p that Harry bought his at, and the culprit seems to be too much competition in the world of adult content. Hmm, I wonder. Just as I'm clicking on the paper's website, the doorbell goes.

"Would you get that, dear? I'm tied up at the moment," I say, as a graphic image of a young woman in stockings fills the screen.

The only reply is the suck and roar of the vacuum cleaner upstairs. Finally I trudge out to the front door to see a card being pushed through the letterbox, and the familiar but elusive yellow and green of a City Link van sitting outside. Exploding into action, I fling open the door and tear after the driver in a blur of paisley slippers. He stops just before getting into the van, and I finally take delivery of Eunice's book, A Gentlewife's Guide to Pleasing Her Spouse, by Lady Lucinder Mockett, which I had ordered for Valentine's day.

Elevenses: Two raspberry and cream tarts from the independent baker in town, in commiseration of the fact that I got the right share to short, but that the market got it wrong.

TUESDAY 22 APRIL: Rights and wrongs

Royal Bank of Scotland has launched the rumoured £12bn rights issue that just a few months ago we were told wasn't ever going to happen. I don't really know what Tier 1 capital is, but I'm just glad that we didn't listen to KP Sharma at the share club. If we'd bought the shares as he recommended we'd not only have lost a wodge of cash in the falling price, but would have needed to stump up extra lolly for the rights just to retain our share of the bank's profit. It's all very well talking about 11-for-18 at 200p, but what does it actually mean to shareholders, and how can we work out whether it's value for money? I would normally ask Perfect Peter Edgington this kind of question, but after the Antichrist's devastation of his PC, I suspect that I'll be persona non grata for a long time to come. Perhaps KP himself will be able to walk us through the calculations, because you don't see it in any of the papers.

MORE FROM THE SAGE OF SUBURBIA...

Read more of Bernard's musings at his IC home page.

Write to him at bernard.jones@ft.com

You can buy Nick Louth's two Bernard Jones books at a discount in the IC bookstore.

  • Back to top

Products and Services from Barclays Stockbrokers.

The UK’s No.1 Stockbroker

Stocks and Shares

Contracts for Difference

Financial Spread Trading

Gilts and Bonds

Funds Market

FX

Education Centre

Trading Simulator

Advertorial Feature

Take control of your investing with CFDs

Have you ever watched a move in the markets that you saw coming, but you weren't able to exploit?

by Dominic Picarda

Advertorial Feature

Spread your risks with spread trading

With so many big moves in the world's financial markets, there have seldom been more opportunities around for spread traders. Isn't it time you joined them?

by Dominic Picarda